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Building Credit
Risks TroubleTypes
of CreditFees
Final Jeopardy
300
500
300
Charge imposed for not paying on time.
Late payment fee
Fee charged for using the credit card even when you pay off the balance
in full every month.
Minimum finance charge
The process of moving an unpaid credit card debt from one issuer to
another.
Balance transfer
The interest-free time a lender allows between the transaction date
and the billing date.
Grace period
A loan that is paid in equal monthly installments with a fixed interest
rate.
Installment credit
This “C” refers to the way you handle money and have repaid debt in the
past.
Character
This “C” refers to the value of your assets or what you
own.
Capital
Establishing a steady work record and paying bills promptly both help
with this.
Daily Double!!!
Building Credit History
This “C” refers to your ability to pay the debt after considering other monthly
expenses.
Capacity
A document containing financial information about a person, focusing
on his or her history of paying obligations, such as a mortgage, car payment, utilities, and credit cards.
Credit Report
The maximum amount you can charge on a credit account.
Credit Limit
The low rate charged by a lender for an initial period to entice customers
to switch credit cards.
Introductory or teaser interest rate
Have passed a preliminary credit-information screening to qualify for
a credit card.
Pre-approved
When will you lose your grace period on a credit card?
When you carry a balance
This short term loan can have interest rates as high as 300%.
Payday Loans
60% of people don’t pay debt for this reason.
Loss of Income
The first step to take if you can’t pay your bills.
Take a look at your budget.
You combine your debts to make only one payment, usually lower
than the total amount of your monthly debt payments.
Loan Consolidation
A legal procedure that withholds a portion of your earnings for the payment of
debt. It also sounds like a sprig of
parsley on your plate.
Garnishment
A legal agreement between a lender and a debtor.
Permits lender to collect part of debtor’s wages from an employer if debtor fails to make regular payments.
Assignment
Items and services are paid for in a single payment, within a given time period, after the purchase. Interest is usually
not charged.
single-payment credit
Many items can be bought using this plan as long as the total amount does not go over
the credit user’s assigned dollar limit.
revolving credit
Merchandise and services are paid for in two or more
regularly scheduled payments of a set amount. Interest is
included.
installment credit
What credit companies would like you to continue to pay them.
Minimum Payment
Ideally what you can do to avoid paying interest on credit cards if you
do make purchases with them.
Pay the entire balance on time.
If interest rates are low and a person borrows the maximum they can
tolerate, what is the biggest risk to them?
Interest Rate Increase